Public Bill Committee

[Mr. Martin Caton in the Chair]

Clause 13

Investigation of complaints relating to disconnection of gas or electricity

Lorely Burt: I beg to move amendment No. 53, in clause 13, page 9, line 41, at end add—
‘(8) If the Council refuses to investigate a complaint under subsection (4) it must write to the complainant as soon as reasonably possible, setting out—
(a) its decision not to investigate the complaint, and
(b) the reasons for its decision.’.
We have a two-handed situation on the Liberal-Democrat Benches, so I apologise in advance for any future confusion that we shall cause. I welcome you to the Chair, Mr. Caton, of this extremely well-mannered and productive Committee as it has so far proved to be.
The amendment is simple. It would introduce subsection (8) to ensure that, if the council refuses to investigate a complaint, the complainant is entitled to know in writing that it will not investigate the matter and the reason why it has taken that decision. Such a provision would be entirely reasonable and we look forward to hearing what other members of the Committee think of this sensible amendment.

Jim Fitzpatrick: Good morning, Mr. Caton. The Committee warmly welcomed you and your co-Chairman on Tuesday and expressed its collective confidence in your skill to guide us through our deliberations. I am sure that I can say on behalf of Labour Members what a pleasure it is to see you in the Chair this morning.
Amendment No. 53 would require the new council to write to a consumer as soon as reasonably possible if it decided not to take up a complaint made by that consumer as a result of any of the exceptions listed in clause 13(4) and to provide reasons for its decision. At present, the Department for Trade and Industry sets key performance indicators for its non-departmental public bodies as part of the annual budget and work programme round. That process results in targets. In the case of Energywatch, for example, the body has targets to resolve 95 per cent. of inquiries within 10 working days; to resolve 80 per cent. of complaints within 35 working days; and to resolve 95 per cent. of complaints within 66 working days.
Those targets and performance against the targets are published in the Energywatch annual report. The Committee can be sure that that will be a feature of the annual reports for the new council as provided by clause 7(2)(c), which allows the Secretary of State to specify matters to be included in the report. In future, for the new council we will establish a comprehensive set of performance targets that will be measurable and meaningful. They will be challenging and more precise than what is envisaged by the amendment, which refers to the council writing to the complainant
“as soon as reasonably possible”.
 The performance targets will cover such issues as response times to consumers on any inquiry or correspondence and keep consumers informed about the progress of their inquiries. We want to ensure that the new council delivers on demanding targets to provide excellent service for consumers. The amendment attempts to set what should be best practice for the new council in dealing with consumers’ complaints. Since the functions of the new council are focused specifically on aiding consumers, the council should develop its own processes and targets for communicating with consumers.
We take the purpose of the amendment seriously and do not disagree with the overall objective. However, as I have explained, we are already doing what the amendment seeks by setting targets for non-departmental public bodies such as Energywatch. The system will provide us with the flexibility to set the right targets for the new council to ensure that it provides the high standards of service for consumers that we expect. In light of my explanation, I hope that the hon. Lady will understand why the Government are unable to accept the amendment and that she will withdraw it.

Lorely Burt: If the Minister is saying that the requirement to respond in writing to the complainant is already covered in the clause, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 13 ordered to stand part of the Bill.

Clause 14

Reference of matters to the Gas and Electricity Markets Authority

Question proposed, That the clause stand part of the Bill.

Jim Fitzpatrick: Clause 14 requires the new council to refer a complaint that it considers to raise issues of general relevance made under clause 11(1)(a) to Ofgem. It will also be required to refer complaints made by designated vulnerable consumers and those relating to the disconnection or threatened disconnection of a gas or electricity supply to which clauses 12(3) or clause 13 apply. The council will refer such complaints when it considers that Ofgem’s regulatory functions may be exercisable and when Ofgem is not already aware of the complaint. When a complaint about a gas or electricity disconnection is made to the council and referred to Ofgem, the council is not obliged to investigate until the authority has had a reasonable chance to exercise its enforcement functions.
Clause 14 focuses on resolving problems in the most effective way. When the authority has enforcement powers in respect of complaints made by the consumer, it is sensible to ensure that Ofgem—the regulator—is aware of the matter and that it has the opportunity to use its powers to resolve it. That position is the same as the current provision.
 It is important that Ofgem is made aware of problems that arise from a situation in which a licencee’s behaviour breaches licence conditions. Ofgem has powers to enforce licence conditions by, for example, imposing financial penalties of up to 10 per cent. of turnover. Ofgem also has powers to determine connection charges. When a consumer seeks connection to the electricity or gas network and is not willing to accept the distribution company’s quotation for the work, the issue can be referred to Ofgem, which can make a determination on the reasonable amount that a consumer can be asked to pay. That is an example of an issue that can be referred to Ofgem by the council for resolution.
The clause provides for the new council to notify a complainant if it considers that a complaint refers to a matter that can be referred to Ofgem under existing legislative provision. In our sitting of Tuesday 17 July, reference was made to the need to ensure that the council notifies a complainant in accordance with the key performance targets that we will set out. I commend the clause to the Committee.

Mark Prisk: Thank you, Mr. Caton. I, too, welcome you to the Chair. I do not think that I have had your guidance before in a Standing Committee or, as we must now call them, a Public Bill Committee, but I am delighted to have such guidance now as we continue our deliberations.
I welcome the Minister’s opening remarks on the clause. He rightly said that it will require the council to refer a complaint that stems from clauses 11, 12 and13 to Ofgem when it considers the authority’s powers to be exercisable which, in principle, is a perfectly reasonable measure. However, as the Minister will know, there will be cases on the margins of Ofgem’s power, as it were, over which there may be some dispute, particular regarding disconnections. It would be helpful if the Minister would express his views or give some guidance to the Committee now or in the future as to what will be the guiding principles in cases that involve a dispute over whether a matter should be referred to Ofgem.

Susan Kramer: Thank you, Mr. Caton. We are making the matter of who is speaking for the Liberal Democrats very complicated, so I much appreciate your powers of observation.
For the sake of clarification, as I understand it, Ofgem will be responsible for setting the standardsfor complaints procedures for electricity suppliers. Presumably, Ofgem will need to get information about the kinds of complaints that are being made from the National Consumer Council, whether or not suppliers’ complaints procedures are adequate, or whether the process is effective in the real world. Does the Minister see the Bill as providing the structure that will allow the transfer of necessary information?

Jim Fitzpatrick: In our Tuesday sitting, there were quite a few references to double acts—I myself was subject to some of the knockabout. The hon. Members for Richmond Park and for Solihull were not referred to then as Thelma and Louise, but I can assure them that if they ever were, it would be in a complimentary sense. [Interruption.] The hon. Member for Rochford and Southend, East (Mr. Duddridge) clearly does not have a problem with which Minister will respond to him today.
 The arrangements about whose uncertainty the hon. Member for Hertford and Stortford asked will to a certain extent have to be worked out in the implementation and work programme stage in the months ahead to identify the lines of responsibility. The new council will clearly have a keen interest in ensuring that it knows when it will have responsibility and when it can and cannot pass matters on. There will need to be co-operative arrangements and understandings between the regulators and the NCC on how to handle complaints, who should do so and how to resolve issues that could be handled by either or both. They will have to identify in due course how the arrangements are working and I am sure that that will be of direct interest to the consumer, who needs to be confident that it is seamless. The consumer will need to understand that a complaint that they register will be dealt with. Whether it is handled by one or by the other will be a matter for the organisations, but they will need to communicate that to the consumer so that the consumer knows that their complaint is being handled and who they can contact.
On the point made by the hon. Member for Richmond Park, flows of information will be established between the regulators, the redress schemes and Consumer Direct under the redress provisions. I know that she has informally raised matters about complaints handling procedures, and we shall deal with those in detail later—probably under clauses 47 to 52. We are happy also to talk to her informally to give her as full an answer as possible before the matters are raised in more detail in due course.

Question put and agreed to.

Clause 14 ordered to stand part of the Bill.

Clause 15

Reference of matters to the Postal Services Commission

Question proposed, That the clause stand part of the Bill.

Jim Fitzpatrick: This discussion is virtually identical in point of principle to that on clause 14.

Susan Kramer: I wish to raise an issue similar to that which I raised on the previous clause, but there is a slightly broader set of questions here. With the disappearance of Postwatch, can the Minister clarify which of its responsibilities the National Consumer Council will pick up and which will be left to be picked up by Postcomm? He will be conscious that Postwatch has effectively acted as the consumer arm of Postcomm and that the situation has been a little different from the energy utility arrangements.
In that context, we are particularly concerned by earlier discussions in the Committee. The Minister will know that 90 per cent. of Royal Mail’s activity is related to businesses rather than domestic consumers, and there is a new consultation on a proposal by Royal Mail to change its pricing to a zonal basis. Yet in our earlier discussions there seemed to be a fair amount of ambiguity about how much the National Consumer Council’s remit would include the importance of focusing on business. It could, but it was clear that that played a secondary role to that of the domestic consumer in the view of many Government Members. A critical issue for business arises: where on earth will that responsibility lie? Postcomm focuses on the licence criteria, which do not capture any notion of consumer benefit or disadvantage.
As in the earlier clause, Postcomm will need to set up complaints standards. Royal Mail has a modest complaints process, and in the past everyone has relied on Postwatch to add a complaints arm. Postcomm will need to develop and approve a proper complaints system. How does the Minister envisage that process going forward so that we do not have a hideous gap in the transition from one system to the other?

Jim Fitzpatrick: The hon. Lady raises several fair points. To a certain extent, the hon. Member for Hertford and Stortford raised the principle of working out the details of complaints handling procedures, responsibility, accountability and communications, and that is work in progress. I will be able to say a little more on that when we deal with clause 16 stand part.
I am grateful that the hon. Member for Richmond Park told me informally outside Committee that she was going to raise the question of complaints—business complaints in particular. I know that we are going to have another informal discussion in the interval today to ensure that we can give a more substantive answer when we get to the part of the Bill that deals with complaints handling and redress procedures. I hope that we can deal with that matter in due course.
The new council will provide consumer advocacy and support for vulnerable consumers and businesses as well as consumers generally. It will be a matter for the new redress schemes to resolve the complaints, which we will be coming to between clauses 47 and 52.

Question put and agreed to.

Clause 15 ordered to stand part of the Bill.

Clause 16

Investigations relating to public post offices

Question proposed, That the clause stand part of the Bill.

Jim Fitzpatrick: Clause 16 provides a specific power for the new council to investigate any matter relating to the number and location of public post offices in the United Kingdom. That specific function recognises the importance of the post office network, and the valuable work undertaken by Postwatch on the issue. It mirrors the provisions in the Postal Services Act 2000. There is no change to, or weakening of, the powers to protect consumer interest.
Maintaining the existing sectoral expertise in the postal services sector is vital to the success of the new body, and we recognise the importance of that in a sector that has only recently been opened up to competition. Having a strong consumer advocate in the postal services sector, and maintaining the sectoral expertise that Postwatch has built up and which the new council will inherit are vital to the Government's proposals for a sustainable post office network.
As a result of the clause, the new council will continue the role of Postwatch in representing the views of consumers in the Post Office restructuring programme, offering consumers a stronger voice on that and similar issues that arise in other sectors. We envisage that the new arrangements will be in place within a year of the Bill receiving Royal Assent.
The Minister for Trade, my right hon. Friend the Member for Makerfield (Mr. McCartney) referred yesterday to the project that is under way to plan the implementation of this important Bill. He assured the hon. Members for Hertford and Stortford and for Richmond Park that we would keep them briefed on the work as it progresses.
Postwatch is fully engaged in early planning for implementation of the new arrangements. Both the chair and chief executive attend the two groups that have been set up to oversee implementation. Both groups meet monthly, and also include representatives from Energywatch, the National Consumer Council and the Office of Fair Trading. The groups are tasked with ensuring that consumer interest continues to be effectively represented both during the transition to the new arrangements, and once the new arrangements are in place. Their responsibilities include work on the timetable for implementation.
Other work undertaken by the groups so far includes: the mapping of existing work; the transferral of resources and best practice to the new council as well as additional work that the new council could usefully undertake; the identification of tasks required to close down Energywatch, Postwatch and the National Consumer Council; and early planning to extend the Consumer Direct service to the energy and postal services sectors.
 We are taking great care to ensure that the work being undertaken by Postwatch on Post Office network restructuring will not be disrupted during the transition period. Additional staff and other resources are being allocated to Postwatch to assist them with the programme, and these resources will be carried forward into the new arrangements for the duration of that work.
We recognise the importance that Postwatch places on the work of its regional committees, and the role they will play in the assessment of the Post Office network restructuring programme. The Bill makes specific provision to enable the new council to establish regional committees when it considers them to be beneficial to consumers. That is a matter for the new council to determine, but as I have said, we are working with the existing consumer bodies to plan for the implementation of the new arrangements. I move that this clause stand part of the Bill.

Mark Prisk: I am grateful to the Minister for those opening remarks. However, I think that they focus primarily on the transfer of where we are now to what is proposed in the Bill rather than what is actually in the Bill. The closure of post offices is clearly a matter of great concern to many of our communities. The Minister will know about both the hurt and the anxiety that the policies of the Government and Royal Mail are causing. However, I do not propose to rehearse here all those arguments about the way in which the Government’s policy is failing many of our communities. What I would like to do is to explore the issue and thelikely operation of clause 16, particularly the phrase in subsection 1:
“Without prejudice to the generality of section 11, the Council may investigate any matter relating to—
(a) the number and location of public post offices”.
That is, apparently, a very wide remit and it is welcome in that sense. However, I would like to explore whatthe phrase means in practice. For example, wouldthe council be able to investigate the rationale of the Minister’s policy and of Royal Mail’s decisions in the current round of planned closures? It is unlikely, I would have thought, that every last closure under the current proposals will be completed by the time that this measure comes into force. So, one would like to know whether, in fact, this power would extend backwards, to enable the council to examine something that is brought before it at that point, albeit that the original policy may have occurred before the Bill becomes law. That is one area I would like to examine.
It is not just a question of the retrospective nature of considering something that happened before the Bill becomes law; it is a question of examining the effect of that policy, which will still be current when the Bill becomes law. I do not think that a defence of “It’s retrospective, therefore we cannot look at it” would be sufficient. However, I would be interested to hear the Minister’s reply.
 In particular, thereafter would the council be able to investigate the funding issues that Royal Mail would often cite as being a case for future closures or relocations? Royal Mail is a public company and therefore has certain matters of openness, but it will also have certain matters of confidentiality, which Ministers often cite when they debate these issues in the House. Further to that, if the relevant papers are not forthcoming—whether from Royal Mail, Post Office Counters, or other related sub-units of the organisation, or indeed the Department—how will the council be able to secure those papers in order to fulfil its investigations? I think that those are the principal areas that I would like to explore with the Minister, if I may.

Susan Kramer: I would like to explore much further the transition arrangements, as it were, that have been described, and establish whether it is possible to put in place transition arrangements that will be robust enough to deal with the kind of pace of closure that is being proposed for the Post Office network. Some 2,500 closures are proposed, the process will start in the summer and extend over two years and that figure does not include voluntary closures, which presumably will take place at the same time, particularly if we continue to have the withdrawal of business from our post offices, which makes it less and less economic for individuals to remain as postmasters and sub-postmistresses.
 The Minister mentioned the regional structure that is so critically important to the way that Postwatch currently responds to consumer needs and to issues related to post office closures. As I understand it, I think that the nine regional committee members, who I believe are all Government appointees, will in effect lose their authority somewhere in the process of this transition. I wonder if the Minister can help us to understand how there will be some seamless flow of authority when these various regional committees are playing such a key role in providing advice. I understand that the consultation period for the closure of a post office will be something like six weeks, which is a very short period. If that period happens to coincide with the change in authority and personnel, perhaps the Minister could give us some idea about how that change will not disrupt the underlying purpose of the role that Postwatch has played, which is the role that the National Consumer Council intends to play in future.
I think that it is necessary to put on record a great deal of concern about the fact that transition is something that is easy to describe in theory, but very difficult to implement, particularly at a time when a very significant piece of work is being undertaken that is dependent on a part of the structure that is not core to the activity of the National Consumer Council. The principle that the Minister has described to us is of a national council rather than a regional one. It provides the opportunity to create regional, frequently ad hoc, committees, but that is not core to the structure or to the functioning of the organisation. We need to put on record that we are concerned about that.
 All the discussions have focused on the 2,500 post offices that we assume will be closed with compensation under a forced closure programme. There has been very little discussion of voluntary closures, however, which will surely happen at a fairly rapid pace at the same time. There is no clarity as to whether those post offices will be replaced or what will replace them. We do not know whether they will be left closed provided that that does not disrupt the access criteria. How on earth will the new organisation cope with that process during the transition?

Jim Fitzpatrick: Opposition Members have raised entirely legitimate concerns about certainty. The hon. Member for Hertford and Stortford correctly described clause 16(1)(a) as wide-ranging. By way of assurance to him, I say that the questions that he raised relate to the independence of the new National Consumer Council, which we have discussed. That thread will run through our discussion of additional clauses later.
 The arrangements hand over from Postwatch to the new council the examination that Postwatch has already made of the Government proposals. It has been detailed work; I think that Postwatch made 199 recommendations during the course of the consultation, the results of which are currently being assessed. The Secretary of State is due to make a statement to the House in May, when we have got past purdah and fully assessed the 2,500 responses that we have received. I hope that it will be clear that there has been a thorough examination of the conclusions that we set out in the consultation and how we reached them, and of our response to the submissions that we have received. That also relates to the point that the hon. Member for Richmond Park raised.
In his statement on 14 December, the Secretary of State laid out the access criteria that we think are appropriate for the Post Office. They will provide the template to which the new National Consumer Council will hold the Government and Post Office Ltd, by stating that there should be no further diminution. There is concern about natural closures; there will always be natural closures, because people retire or die and leases come to an end. That will be a matter for Post Office Ltd to manage. The council will hold it to account and protect the consumer’s interests.

Tobias Ellwood: It is on the point of holding the Government to account that I wish to pose a question. My hon. Friend the Member for Hertford and Stortford stated that this is an extremely wide-ranging clause. Were the council to conduct an investigation into the number and location of post offices in England, Wales or Scotland, and come to the conclusion that there were not enough post offices, how would the Government be held to account and persuaded that we needed more?

Jim Fitzpatrick: The hon. Gentleman tries to draw me into a hypothetical discussion of “what if?” It is a legitimate question. I think that it would be a matter on which the council would have to engage with Government. If the council felt that there was a deficiency in the number of post offices or in any other area for which it thought that the Government was responsible, it would use the dynamic of its relationship with the Government to deal with that.

Mark Prisk: Would that dialogue be made public? Would we know that the National Consumer Council had made it crystal clear that it felt that the Government’s policy was wrong and that post offices needed to be reinstated?

Jim Fitzpatrick: That brings me neatly on to the hon. Gentleman’s other, earlier points about catering for information requests, the publication of those requests and how the council could seek information. We will come on to those issues in clauses 24 and 25, which include a clear power and expectation for the council to seek information from licensees, for example. We will grant it a statutory power to get information and publish reports. We will shortly come on to the clause that deals with price sensitivity and commercial confidence in the context of those who give evidence to the NCC or the Secretary of State. They need to have the confidence that, while the NCC has the power to seek their evidence and publish reports, they will not be undermined in the market place.
My final response to the hon. Gentleman is that the NCC will be fiercely protective of its independence. It will want to demonstrate that it will publish that which it believes to be in the interests of consumers.

Tobias Ellwood: I am grateful to the Minister for allowing us to probe a little further this small but hugely significant clause. It clearly gives the council powers to investigate the number and location of post offices. It would be helpful for the Committee to understand where its thoughts, recommendations or investigative reports might lead. If they are simply going to be put into a file and not presented to the public or discussed by a committee, we have to ask why the clause is there. It is there for a reason, and that is to enable the public to understand what the recommendations are. We need to know whether, when those recommendations have been made, the Government will be held to account and whether any action will follow.

Jim Fitzpatrick: The answer to the hon. Gentleman lies in the certainty that the new NCC will be able to act independently. It will be able to publish information and reports as it wishes. It will then be a matter for public representatives, should they think it appropriate, to hold Government to account.
I cannot imagine my colleagues seeing a report from the NCC that says that the Government have got something dreadfully wrong and sitting there quietly. They will take us to task, and I guarantee that the Opposition Benches will be in uproar. In setting out the powers and the statutory responsibilities of the new NCC, we are ensuring that there will be opportunities through all the mechanisms of Parliament for the Government to be held to account should the NCC challenge them on any matter for which they are responsible. Nothing is being hidden here.

Mark Prisk: Before we are in uproar on these Benches, may I more modestly ask whether, in investigating whether Government policy is appropriate, the council will be able to call Ministers?

Jim Fitzpatrick: I shall get back to the hon. Gentleman on that, and advise the Committee. My instinct says that that would not be an expectation. Later clauses give the NCC the ability to seek information and evidence. The Trade and Industry Committee has the opportunity to call Ministers to account, and I am sure that it will consider any report that is published in due course as closely as it already does those published by bodies such as Postwatch. It will certainly hold Ministers to account by requiring them to give evidence.

Mark Prisk: Would its investigative powers enable it to call directors of Royal Mail?

Jim Fitzpatrick: I think that we are anticipating clauses that we have yet to debate. They set out the powers of the new NCC to seek information and evidence from licensees, regulators and other interested parties. The hon. Gentleman asked earlier how we could ensure compliance. There are also powers relating to the civil courts and regulators, and mechanisms will be put in place to ensure that it is possible to obtain information that has been requested.

Tobias Ellwood: It is important to place on record our concern about what has happened with the post offices. I hope that the chairman of the new council will demonstrate his impartiality. One of his first tasks will be to make an assessment of the number and location of post offices in England and Wales. We press the point that it will only be a matter of time before such a report comes before Parliament; it will be the first test of the power of the council, its recommendations and its accountability.

Jim Fitzpatrick: There is an adjournment debate on post offices in Westminster Hall next Tuesday morning. If any of my colleagues wish to join me there it will be their first opportunity to carry on this discussion on post office closures. There will be another opportunity after the Secretary of State has made a statement to the House following the consultation exercise, to which we have had 2,500 responses. Post Office Ltd., with the assistance of Postwatch, will then engage in consultation with parliamentarians and local authorities. There will be opportunities to scrutinise the process of the restructuring programme as it progresses. Common sense dictates that the transition from the present arrangements to the new arrangements for this very important core part of the work programme should be as seamless and efficient as possible.

Mark Prisk: The Minister is obviously very keen to discuss the matter in other clauses, in other places and at other times. We return to the simple question, to which he has not responded: are the investigatory powers retrospective or not? It would be nice if he could respond to that question today, but perhaps he will do so next week, who knows?

Jim Fitzpatrick: The answer is that the new NCC has independence of action; it can determine what it wants to do. As a result of the scrutiny offered at present by Postwatch and by what will happen in the months ahead, I would be surprised if the new NCC would want, retrospectively, to look at what has gone before, or already been undertaken, and given that Postwatch will be centrally involved. I am not going to anticipate what the new NCC will, or will not, want to do; it will be for the NCC to develop its own work programme.

Stephen Pound: May I ask my hon. Friend if he is as concerned as I am that while we are talking about putting down markers, as the hon. Member for Hertford and Stortford did, we are in danger of extending the ambit and remit of the NCC to the area of social policy? If post office closures are defined on commercial terms within a set template, but there is undoubtedly a social policy and a social impact dimension to the closures, would it be appropriate or fair for the NCC to have to widen its remit to consider all those supernumerary issues? That is the role of Parliament; it is the commercial viability and the service delivered to the consumer that should be the prime remit of the NCC.

Jim Fitzpatrick: My hon. Friend makes some strong points. I reinforce what he said by adding that the new NCC has extensive investigative powers. It will determine its own work programme and it will be independent in deciding what it wants to look at. I am not going to anticipate that it will want to revisit the Government’s decisions from the full statement in December, as that will be a matter for the NCC. I would be surprised if it did so, given that it will be halfway through the work programme, which the hon. Member for Richmond Park outlined. However, it is unlikely that it would not take a very close interest in it.

Susan Kramer: I thank the Minister for giving way, as I want to respond to the comments made by the hon. Member for Ealing, North (Stephen Pound). In the past, there has been a fairly generous interpretation of Postwatch’s responsibility to the consumer, which includes many social issues. It is not merely a matter of whether the post office gives people a decent service in the narrow sense of whether it sells stamps efficiently. The post office has a recognised social role in termsof the viability of communities and of vulnerable consumers, which I understood to be a significant part of its remit. That certainly comes into the social arena. Could the Minister to confirm whether he now sees the NCC as having a narrower role in that regard because that would raise some serious concerns for us? Where will that missing piece of activity—representation and advocacy—go if it does not fall within the remit of the NCC?

Jim Fitzpatrick: I hesitate to point out that the hon. Lady has tabled an amendment later in the Bill to say that the new NCC should report in the wider public interest because I may be accused by the hon. Member for Hertford and Stortford of not wanting to discuss the issue now. I am not running away from any debate, but she has tabled an amendment specifically on this issue. My hon. Friend the Member for Ealing, North was saying that there is a particular role for the new NCC, there is a role for Postwatch and we are not moving away from that. It has strong consumer interests. It has independence of action in terms of seeking information and evidence and publishing reports.
I must tell the hon. Lady that we oppose her amendment, which I am sure will come as no surprise to her, because accepting it would take the NCC into the territory where my hon. Friend says it does not have a role. It is not a social policy think tank, it is there to be the advocate and champion for consumers. If it is in the consumer interest, which may well be very wide, it has a role and it will be up to it to determine what its work programme should be and what it wants to publish. But to give it the role described in the hon. Lady’s amendment would go too far.

Tobias Ellwood: It is interesting that the hon. Member for Ealing, North raised this issue. The council is the custodian for the consumer and so its voice must be listened to. Our concern is how far that voice will be listened to. On the question of accountability and independence, will the chairman of the council be allowed to be a signed-up many of any political party?

Jim Fitzpatrick: There are tried and tested arrangements that have public confidence in terms of the appointments of individuals to positions such as this. I have no reason to think that there will not be full public confidence in whoever is appointed in due course.

Question put and agreed to.

Clause 16 ordered to stand part of the Bill.

Clause 17 ordered to stand part of the Bill.

Clause 18

Secretary of State’s power to require reports

Mark Prisk: I beg to move amendment No. 16, in clause 18, page 11, line 5, leave out ‘may’ and insert ‘shall’.

Martin Caton: With this it will be convenient to discuss amendment
No. 17, in clause 18, page 11, line 5, at end add—
‘(3) In exercising the powers under this section the Secretary of State shall respect the independence of the Council.’.

Mark Prisk: These two probing amendments seek to establish just how open the Government will be in requiring reports. We believe that maximum transparency is vital. It is vital for the council if it is to have authority and it is also important for the consumer as a whole. The Secretary of State should not therefore be in a position to cherry pick which reports get published or, for that matter, to be seen to cherry pick. The way in which a Secretary of State might reasonably make a decision is important.
We have just discussed the obvious controversy of the post offices, but there are other areas where there will be tension and there is an understandable problem. Take the question of food safety and consumer information. Quite understandably a Government may say that there are serious and complex issues about food safety. I recognise, as most hon. Members probably do, that there is no such thing as no risk. But in the area of food safety there will always be a problem because it can often get misreported. It is often overblown in the media and can frighten people. There will be a natural tension there and Ministers may wish to think carefully about how information on food safety issues is released. Obviously the NCC will have a narrower remit. Its purpose will be to ensure that it can produce consumer information, of whatever character.
The purpose of amendment No. 17 is to establish the NCC’s independence. As I say, these are probing amendments. I want to explore with the Minister how the Government would approach the issue, because it is an important area on which we need some clarity. When the Bill is passed and becomes law, there is a clear understanding about how the Government would approach that kind of more awkward situation in which Ministers will be acting, quite reasonably, on scientific advice, but where there will be a potential—this is what we are concerned about—that the ability to have flexibility may not be in the interests of the Government of the day.

Jim Fitzpatrick: The amendments concern a discretion of the Secretary of State not to publish a report prepared for him by the new council under clause 18. That issue has already been extensively debated in the other place, and I am sure that the hon. Gentleman has looked at that. It was clear from that debate that the concern here is essentially about the need for transparency in the Government’s dealings with the new council, and the need for public accountability, because of the tensions that have been correctly described by the hon. Gentleman. I would like to reiterate that the Government are in total agreement with those intentions, and we have made the case that the discretion afforded to the Secretary of State not to publish a report prepared for him by the council impacts in no way on either of those principles. The point to note here is that the discretion under clause 18 for the Secretary of State in relation to the publication of a report is necessary to deal with particular circumstances, such as instances where the report contained sensitive information that was commercially confidential or price-sensitive. That is not a new concept, and would apply in circumstances in which, for example, disclosure of information provided by a company would weaken its position in a competitive environment by revealing market-sensitive information or information of potential usefulness to its competitors.
 Under clause 29, the council will have to consult a business or individual if a report that it makes contains business or personal information before that is disclosed in the report. The value of the report to the Secretary of State might be significantly diminished if the information were not contained in the report. However, in those circumstances the Secretary of State would have to consider whether it was right to publish the report.
Section 244 in part 9 of the Enterprises Act 2002 sets out considerations that apply where a public authority is considering disclosing certain specified information, including commercial information whose disclosure the public authority thinks might significantly harm the legitimate business of the undertaking to which it relates, or information relating to the private affairs of an individual whose disclosure might significantly harm the individual’s interests. That provision applies generally to the disclosure of information obtained by the council under the Bill, but not to reports of the council, where the different provisions that I have mentioned in clause 29(5) apply.
Information of a confidential nature might be necessary to support the recommendations in a report. A requirement on the Secretary of State to publish every report submitted by him might create a deterrent effect on external experts or stakeholders, who might be reluctant to provide particular information because it might be published. It is not inconceivable that a report prepared by the new council for the Secretary of State could contain such information that was given on condition that it would not be published.
 A key consideration here is that there may be good reasons why the content of reports prepared and submitted to the Secretary of State to aid the decision-making process should not be published. The decision not to publish a report in those circumstances would be to protect the confidences of individuals and businesses, not for the purpose of protecting Government.
Clause 18 must be viewed in the wider context of the other clauses that give the new council the statutory basis to carry out its duties. The need for the new council to be able to act without being constrained is fundamental to what we are trying to achieve with the introduction of these measures, and is in no way compromised by the powers given to the Secretary of State by the clause. It is not about taking away from the new council; it is about allowing the council to give relevant information to Government.
 If the council determines that the issue of the report that it has prepared for Government under clause 18 is one of interest to consumers more generally, and the Secretary of State has decided not to publish that report, the council can choose to exercise its powers elsewhere within the Bill, such as under clause 17 or clause 19.
Clause 17 enables the council to prepare and publish a report on any matter falling within the scope of its functions. Clause 19 enables the council to publish advice or information about consumer matters for the purpose of bringing issues of importance to the attention of the consumer.
A report prepared under the powers in clause 17, for example, which covered the same issue as a report prepared under clause 18, could be published without information that was considered to be sensitive and in a format that may be more in line with the needs of consumers. That matter would be one for the discretion of the council, but with those reassurances. The council, therefore, has the ability to determine what it publishes, but the Secretary of State has some discretion in being able to withhold information that may be price-sensitive. I hope that reassures the hon. Gentleman.

Mark Prisk: Is he saying that it would normally be the intention of the Secretary of State to publish, except in those circumstances just outlined?

Jim Fitzpatrick: I think we can generally expect that the intention will be more to publish than not to. The qualifications I gave are examples that may not be entirely exclusive, but are sensible ones, which are pretty de rigueur for Government reports. I think that the reassurances in clauses 17 and 19 give the hon. Gentleman the safeguards that he is seeking. If the council thinks that it would help and be appropriate for consumer protection and interests to publish, it can do so regardless of what the Government say.

Susan Kramer: I thank the Minister. The Liberal Democrats have fully supported the two amendments. In those circumstances, if the Minister’s only intent is to provide protection for necessary commercial information, which should not be shared because of detriment to the provider or to an organisation, would he consider introducing such language into clause 18(2), to make that clearer? We live in a cynical world, and when a clause allows so much scope not to publish, no matter what the intent, if the intent is so narrow, why not include it in the language? Indeed, why not incorporate the language from the Enterprise Act?

Jim Fitzpatrick: The only thing that I would say to the hon. Lady is that clauses 17 and 19 provide strong protection for the council to publish regardless of what the Government suggest.

Mark Prisk: This has been a useful if short debate. I think that in another place a different argument was cited—costs. I am glad that the Minister has not chosen to use that one, because it was frankly unbelievable at the time and gets no better when read a second time. The Minister went for argument no. 2—commercial confidentiality—which the Department wheeled out and dusted off. That is a more credible and reasonable argument, because it is perfectly sensible to suggest that there will be circumstances—whether of confidentiality or sensitivity—when there needs to be an element of discretion. I was particularly grateful to the Minister, in response to my intervention, for making it quite clear—future Secretaries of State will be grateful that he did not make it absolutely clear—that the intention would normally be to publish rather than not. With that on the record, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 ordered to stand part of the Bill.

Clause 19

Advice, information and guidance

Lorely Burt: I beg to move amendment No. 55, in clause 19, page 11, line 11, leave out ‘may’ and insert ‘shall’.

Martin Caton: With this it will be convenient to discuss amendment
No. 54, in clause 19, page 11, line 13, after ‘consumers’, insert
‘or is otherwise in the public interest’.

Lorely Burt: The clause is all about advice, information and guidance. Amendment No. 54 seeks to widen the ability of the NCC to issue advice or guidance on any matter affecting the interests of consumers or
“otherwise in the public interest”.
We feel that it would be appalling if the NCC held information that was in the public interest but, because of the narrowness of the definition, was not able to publish. We have already discussed Postwatch, which the Minister said was not a social policy think-tank. The challenge is how narrowly one defines the interests of consumers. It is a probing amendment. We are asking the Government whether the clause is a bit too limiting. It could be argued that anything could be defined as being in the public interest. We are seeking a bit of clarity about how the Minister defines what is in the interests of consumers and how that differs from the public interest.
Amendment No. 55 would convert another “may” to “shall”. We are not seeking to employ a scattergun approach, but we think that it is important for this particular measure to read:
“The Council shall publish advice or information about consumer matters if it appears to the Council that its publication would promote the interests of consumers.”
I should like to turn that on its head and ask the Minister where the harm is in strengthening “may” to “shall”. Is the purpose of the measure to provide the NCC with a get-out clause if it is under pressure from the Government to cut costs?

Stephen Pound: I referred earlier in the week, possibly injudiciously, to being seduced by the hon. Lady’s Front-Bench colleague, but I must say that the hon. Lady makes a similar capture of my emotions on this occasion. She makes a powerful case, but does she not accept that for the council to publish advice or information, it must produce that advice or information anyway? If it produces it, surely it will not decide not to publish it. Is she not talking about dissemination rather than publication? If the NCC calls in a piece of work and produces it, it will not then sit on it. Inevitably, it will publish it.
 Will she not also consider that the advantage of “may” is that it provides for all the issues of commercial confidentiality, sub judice and cases that might be continuing? Will she not break the habits of a lifetime and trust the Government and the National Consumer Council on this occasion?

Lorely Burt: I am extremely grateful to the hon. Gentleman. I take his point, but on one hand, he is discussing the semantics of whether publication is the same as dissemination, and on the other, he is saying that the NCC will automatically publish. I refer back to my original question. If we replace “may” with “shall”, it will remove a fear in the minds of some of us who might be slightly sceptical about an automatic requirement or the idea that we can always trust the Government. If we had “shall” there, we would not feel that the measure could be used as an excuse for a cost-cutting exercise.

Jim Fitzpatrick: The amendments relate to the powers of the new council to publish advice or information about consumer matters and its discretion in deciding on publication. As drafted, the Bill allows the new council to publish advice or information about consumer matters if it considers that publication will promote the interests of consumers.
 Amendment No. 55 would impose a duty on the new council to exercise the power in clause 19(2) to publish advice or information about consumer matters if it appears to the council that its publication would promote the interest of consumers. As drafted, the clause allows the new council to consider whether publication of such advice would be in the interest of consumers before exercising its discretion over publication.
The new council is being established as an independent body. It must surely be allowed to make decisions about allocation of its resources in accordance with its identified priorities. We believe that the discretion is necessary to enable the new council to take action that it considers appropriate in the overall best interests of consumers. We are not aware of any reasons why the new council, having taken a view on the merits of publication, would then not follow that up with the appropriate action.
Amendment No. 54 suggests that the power to publish advice and information about consumer matters should be extended beyond publication where that is considered to be in the interest of consumers, thereby covering occasions that have been identified as
“otherwise in the public interest”.
 The amendment falls short of stating what criteria would be used to identify when occasions for the publication of advice or information about consumer matters in the public interest, which is not already promoting the interests of consumers, might arise. The new body is being established as a consumer advocacy body, therefore its remit is to cover issues from a consumer interest angle and it would typically be able to take a view on the scope of consumer-related issues within its fundamental area of expertise. As a cross-sectoral consumer body, it will be able to cover a wide range of consumer issues.
As it is drafted, the clause sufficiently covers the appropriate scope, which may cover certain issues of public interest from a consumer’s general point of view. There is no reason to extend the focus of the council more widely than its principle remit, which is to work in the interests of consumers. The new council has been given the statutory tools for the job and must be allowed to carry out this function as it sees fit. There is no need for the amendment, so I ask the hon. Lady to ask leave to withdraw it.

Lorely Burt: The Minister’s definition of what is in the consumer’s interest and what is in the public interest is sufficiently wide to give fair reassurance. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 ordered to stand part of the Bill.

Clause 20

Duty to enter into co-operation arrangements

Mark Prisk: I beg to move amendment No. 18, in clause 20, page 11, line 37, at end insert—
‘(2A) Prior to making an appointment under subsection (2)(d), the Secretary of State must consult such persons as would be affected by such an appointment.’.

Martin Caton: With this it will be convenient to discuss amendment
 No. 19, in clause 20, page 12, line 3, leave out ‘As soon as practicable’ and insert ‘No later than six months’.

Mark Prisk: The clause provides for a duty to enter into co-operative arrangements on the part of the council. Subsection (1) says:
“It is the duty of the Council and each designated body to enter into cooperation arrangements under this section.”
A designated body is defined in various ways, including, under subsection (2)(d),
“a person designated by the Secretary of State by order for the purposes of this section.”
Amendment No. 18, which is a probing amendment, is intended to help us understand more clearly the scope of the measure and the Government’s intentions in that area. I hope that the Minister will be able to clarify exactly how the Government intend to appoint such persons, so we can understand that the process will be above board. I hope that he will give us some assurances on that.
 Amendment No. 19, which is another probing amendment, relates to subsection (4). It seeks a little bit more clarity about how the Government intend to approach the publication of their memorandum setting out what they have done. At the moment, the subsection says that that should be done as soon as is practicable, but we seek to amend it to include a timetable of six months, not because six months is necessarily an instant panacea or a perfect period of time, but to be clear as to whether the Government think that it is adequate, or too long or short a time, and what they expect will be appropriate. On that basis, I move the amendment and look forward to the Minister’s reply.

Lorely Burt: I have just a couple of brief comments. We Liberal Democrats were slightly mystified, in respect of the purpose of amendment No. 18, as to why the person would not be consulted. We should like clarification from the Minister. Surely, there would be a memorandum of understanding for anyone with whom the NCC was going to have co-operation. We are not clear about why the provision in question would be necessary.
On amendment No. 19, we think that the idea of having some sort of time backstop could be quite helpful and we would be interested to hear the Minister’s comments—not necessarily on the six months, but on having a time backstop in itself.

Jim Fitzpatrick: Clause 20 requires the council and the designated bodies that are referred to in this clause—namely, the Office of Fair Trading, the Financial Services Authority’s Consumer Panel, and the Consumer Panel of the Office of Communications—to enter into co-operation arrangements, and it includes provisions relating to such arrangements. The Secretary of State can require other bodies to enter into co-operation arrangements by designating them by order.
 Amendment No. 18 appears to be based on a misunderstanding of clause 20(2). These co-operation arrangements are not about making appointments to the new council; they are about specifying which bodies the council must work with in the exercise of its functions, and are intended to encourage effective communication channels, collaborative working, and to provide an effective interface between the council and others where functions and responsibilities coincide or overlap.
The word “person” in clause 20(2)(d) is used in all legislation—and certainly in this legislation—as shorthand for individuals and persons, corporate or unincorporated. The word has that meaning throughout the Bill. During the debate at our first sitting, the Minister for Trade explained that the definition of “consumer” as a person who uses or receives goods or services includes persons corporate or unincorporated.
 Over time, it may be necessary to consider widening the co-operation arrangements to include other bodies, and, in such circumstances, the Secretary of State may designate others, such as other consumer bodies, to be subject to these provisions. It is envisaged that such decisions would be taken after appropriate consultation, and entry into new co-operation arrangements would happen as a consequence. I hope that that explanation clarifies that point.

Mark Prisk: In this context, I understand exactly the point that the Minister is making. He is confirming that it is anticipated that, in almost every instance, the Government will have in mind a corporate body or an entity, rather than an individual.

Jim Fitzpatrick: Indeed, I can give that confirmation. It may be an individual, but it may be an office holder. In that regard, it will be person who is a single individual, but we are talking about persons corporate or unincorporated.
 Amendment No. 19 also relates to clause 20 and to the requirement for the council and a designated body to prepare a memorandum setting out the co-operation arrangements between them as soon as is practicable after agreement is reached on the arrangements. Amendment No. 19 changes that so that a memorandum has to be prepared no later than six months after agreement is reached on co-operation arrangements. We see no reason why the new council and a designated body would not prepare a memorandum of agreement and send a copy of it to the Secretary of State at the earliest possible opportunity. The Secretary of State would certainly want to know the reasons for any delay. The imposition, or opportunity, of a time limit would give the wrong impression of how the process should work. Any time limit specified could end up being seen as a target, and could result in the memorandum being sent to the Secretary of State later and not sooner. Therefore, we cannot accept amendments Nos. 18 and 19, and we request that the movers consider their withdrawal.

Mark Prisk: The Minister has just satisfactorily answered amendment No. 18. I am not entirely confident that he has answered amendment No. 19, although he has demonstrated that the Government would expect a reply within six months. However, as the amendment says “No later than six months”, the argument that this would somehow be regarded as the target date—

Jim Fitzpatrick: Given that these co-operation arrangements are being negotiated, common sense suggests that signing a memorandum of understanding would be the last thing to be done. Therefore, there is an expectation that almost the first thing to be done after signing it would be to send a copy to the Secretary of State. That is why we are saying that six months does not really make sense. We think that it will be a great deal sooner. I know that the intent is genuine but “as soon as practicable” is more appropriate.

Mark Prisk: The Minister is being helpful, and I fully understand that. I said at the outset that this is a probing amendment, and so I do not intend to press it to the vote. My intention is to ensure that the arrangements are clear, and are understood by the parties who have to be engaged in them—and, indeed, by those of us who must then seek to ensure that subsequent scrutiny is appropriate.
In his earlier remarks, the Minister said that he would expect—as any Secretary of State would—a memorandum to be delivered as soon as possible. That is an important point. I am grateful to the Minister for his deliberations. However, on that basis, I am not entirely convinced, although I am encouraged, if I can put it that way. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question put and agreed to.

Clause 20 ordered to stand part of the Bill.

Clause 21 ordered to stand part of the Bill.

Clause 22

Voluntary Activities

Mark Prisk: I beg to move amendment No. 12, in clause 22, page 12, line 36, at end add—
‘(6) The Secretary of State must publish the reasons for any approval given under paragraph 22(4)(b).’.
 This is a probing amendment and our aim is to get the Secretary of State, or perhaps in this case the Minister, to explain to us the basis for making his decisions, or not. In what circumstances does the Minister foresee that this would be unacceptable? For example, if an overseas corporate body were involved, would that be something that would be acceptable to the Government, or not? That is one example; there are others. I would be interested to hear what the Minister has to say.

Jim Fitzpatrick: This amendment relates, as the hon. Gentleman said, to clause 22, the council’s voluntary activities and functions in this part of the Bill. Clause 22 (4) (b) provides for the new national consumer council to acquire an interest in a company with a view to exercising its function under this clause. Following debates in the other place, a Government amendment was moved to make the council’s power to acquire an interest in a body corporate subject to the approval of the Secretary of State. As a body which is part-funded by the taxpayer, there will be a duty on the council to satisfy certain requirements regarding its financial dealings. Having to obtain the Secretary of State’s approval for expenditure in this area ensures that there is a consistent approach to proposed expenditure across all aspects of the council’s functions.
 I am pleased to say—and this might surprise the hon. Gentleman—that the Government accept, in principle, his probing amendment laid to clause 22 of the Bill, that the Secretary of State must publish the reason for any approval given to a request by the new NCC to acquire an interest in a body corporate. This will ensure that any decisions taken are transparent and open to public scrutiny. Having considered this matter, I can advise him and the Committee that we intend to bring forward a Government amendment to like effect on Report on the basis that we believe that the drafting could be technically improved. I hope that, with this assurance, the hon. Gentleman will be minded to withdraw his amendment.

Mark Prisk: I am grateful to the Minister for that. I think that it would probably be wise to shut up and sit down at this point, when one is moving slightly ahead. I am delighted that the Minister has been able to look at this in a positive way and I am happy to withdraw it on the basis that has just been explained.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mark Prisk: I have a couple of points that I wish to raise on the clause as a whole without wishing to detract in any way from the genial state of our discussion. This is a broadly worded clause which enables the council to undertake a wide range of paid and unpaid research and related activities. Subsection 3, as members of the Committee will see, says that the council may:
“Spend such sums as it considers reasonable”.
I entirely accept, and we have always argued, that the council must be independent. However, it would be helpful if the Minister confirmed that he is confident that there are satisfactory management and audit oversight provisions to ensure that, as public money is involved, it is to a standard that our constituents would expect.
Turning to subsection 4, the council is allowed to set up a limited company to exercise a particular function. This is, again, quite a wide power. If that company were to fail or to face significant liabilities, how would the Secretary of State be able to intervene; or is it the intention that the Secretary of State should not intervene?

Lorely Burt: I would appreciate a bit of clarity from the Minister about what he envisages. The measure will give the NCC the power to set up a subsidiary organisation or buy an organisation. The Liberal Democrats are wondering what sort of activities he envisages. The NCC could, if it wished, change its nature and function as we understand it. It could do stuff for money—[Interruption.] Sorry; it could conduct activities, I should say, for money. It is the nature of the beast that we are interested in understanding where he believes the limits of the NCC’s activities should be.

Jim Fitzpatrick: The clause provides the council with the power to carry out commissioned work in any area where it has skill, experience or expertise. Under the clause, the council will be able to give advice or assistance to others and be paid for providing that service. The provision is intended to give the council the power to participate in voluntary activities of its own choosing such as research projects and to receive remuneration for the services provided.
Clause 22(3) allows the council to spend reasonable sums in pursuing commercial opportunities that arise in the fulfilment of its functions, a point raised by the hon. Member for Hertford and Stortford.

Stephen Pound: I am not trying to be awkward; I am not an awkward person. But if the NCC expanded its remit and spread its wings to involve itself in some semi-commercial organisation, and a consumer of the services provided by that organisation—the Minister probably knows where I am going with this—was unhappy about the organisation, to whom would that consumer complain?

Jim Fitzpatrick: My hon. Friend raises an interesting conundrum. Although he protests that he is not a member of the awkward squad, I must remind him that I was his Whip for four years, and I know exactly his talent. I will research his question and get him an answer but I am sure that, as in any organisation, there will be Chinese walls and accountability lines. The new national council will have the sectoral expertise to handle a complaint from one section about dealing with another.
 I was talking about accountability. In response to the point raised by the hon. Member for Hertford and Stortford about financial decisions, like any organisation the council will have an accounting officer, usually the chief executive, who will be ultimately responsible for providing the necessary assurances that the Government’s strict accounting guidelines will be adhered to. On responsibility and liability, any companies set up would be limited companies and would therefore have limited liabilities, so there would be protection. The arrangements laid down for the council contain protections both for the public in how finance is expended and for the council in any exposure to liability that it might have.

Question put and agreed to.

Clause 22 ordered to stand part of the Bill.

Clauses 23 to 25 ordered to stand part of the Bill.

Schedule 2 agreed to.

Clauses 26 and 27 ordered to stand part of the Bill.
 Further consideration adjourned.—[Steve McCabe.]

Adjourned accordingly at twenty minutes pastTen o’clock till this day at One o’clock.